US taxes for prop trading, for example Top Step Trader

[Redshack]

Hello,

I understand that traders for prop shops like Top Step Trader are considered 1099 subcontractors...is this correct?

If so, then I suppose that the special Futures 60/40 tax rate does not apply? Is that so?

Are the profits taxed at the full rate against the net income?

where net income = trade profit (gross income) MINUS standard business expenses (exchange fees, training, memberships, etc)?

And, does anyone know if a checkbook IRA holding an LLC trading account would be tax exempt?

Thanks

 

[deltaf0rce]

Hi there, forgive the rudimentary reply here. Wouldn’t this question be better directed at the Firm- and then maybe you could post their reply? Thx for raising awareness of the shop though with this post.

Any other shops that offer a similar service to them that are worth checking out?

 

[minmike]

Regular income.

 

[deltaf0rce]

Regular income.

Thanks. Do you happen to have any other shops to reference that also do the train/seed model?

 

[minmike]

Never done that model. Cme rules, you need to put up 250,000 and become a non equity member to get the tax treatment.

 

[FTDK]

Hello,

I understand that traders for prop shops like Top Step Trader are considered 1099 subcontractors...is this correct?

If so, then I suppose that the special Futures 60/40 tax rate does not apply? Is that so?

Are the profits taxed at the full rate against the net income?

where net income = trade profit (gross income) MINUS standard business expenses (exchange fees, training, memberships, etc)?

And, does anyone know if a checkbook IRA holding an LLC trading account would be tax exempt?

Thanks

Only way to get an accurate answer to all your question is to contact an accountant.